Spring 2021 - California Mortgage Association

Page created by Helen Stevenson
 
CONTINUE READING
Spring 2021 - California Mortgage Association
Spring 2021
A Publication of the California Mor tgage A sso ciation
Spring 2021 - California Mortgage Association
Spring 2021 - California Mortgage Association
Elizabeth Knight – President
                      PLM Lender Services, Inc.
                                                                                               A P u b l i c a t i o n o f t h e C a l i f o r n i a M o r tg a g e A s s o c i a t i o n

              Michelle Rodriguez – Vice President
                    R.C. Temme Corporation

                  Richard Wachter – Secretary
                     Wachter Investments, Inc.
                                                                     Inside This Issue
                                                                     From the President...................................................................... 2
                   Richard Selzer – Treasurer
                       Selzer Home Loans                             From the Editor............................................................................ 3
          David Herzer – Immediate Past President
                Herzer Financial Services, Inc.                      Sacramento Summary................................................................ 5

        Steve Belleville                    Odell Murry              A “Wyatt” Standard for Insurance Brokers?............................ 7
 Real Estate Lending Group, Inc.      MAI Financial Services, Inc.

          Mark Forbes                          James Perry           Can Private Money Fuel the Recovery Once Again?...........11
    F.E. Forbes Company, Inc.                Alliance Portfolio

         Noah Furie                        Lori Randich              Am I a “Debt Buyer?” Understanding the New
 Budget Mortgage Corporation             Bay Laurel Financial        Wave of Debt Buyer Statutes and Their Impact
     Angelica Gardner                     Stephen Rexrode
                                                                     on Servicing Non-Performing Mortgage Debt................... 13
    Asher Evan Investments             Cushman Rexrode Capital
                                             Corporation             Summer Seminar Save-the-Date............................................16
        Joffrey Long
    Southwestern Mortgage                    Pam Sosa
                                     Standard Mortgage Financial     Spring and Annual Sponsors................................................... 17
     Sandy MacDougall                       Services, Inc.
     Mortgage Vintage, Inc.
                                             Shafiq Taymuree         PAC Contributors........................................................................22
                                                Stonecrest
                                                                     Got Solar? Questions to Ask When
                                                                     Underwriting a Home with Solar Power...............................24
            Michael Arnold & Michael Belote, Esq.
                     Legislative Advocates
                                                                     MEMBER SPOTLIGHT: Donald Hensel....................................26
                          T. Robert Finlay
                            Legal Counsel
                                                                     Stricktly Strickland.....................................................................28

                                                                     Membership Application......................................................... 31
      CMA HEADQUARTERS STAFF
     Jennifer Blevins, CMP             Michael Cochran                                        is published by the California
 Director of Management Services     Webmaster / IT Manager             Mortgage Association, a voluntary trade association
                                                                        serving California mortgage and trust deed brokers
     Teresa Excinia, MBA               Stephanie Schoen                 and lenders.
        Executive Director               Special Projects

       John Berkowitz                  Tricia Schrum, CPA                            2520 Venture Oaks Way, Suite 150
      Publications Director                 Accounting                                    Sacramento, CA 95833
                                                                               (916) 239-4080 – phone • (916) 924-7323 – fax
        Jen Gross, CMP                  Natalie Sinclair                                    cma@camgmt.com
        Meeting Planner                 Special Projects                         www.californiamortgageassociation.com

Spring 2021                                                                                                                                                                Page 1
Spring 2021 - California Mortgage Association
Elizabeth M. Knight
                                                        2020-2021 CMA President

  hope as of this writing you are all           members perform many or all of these           as much due diligence as I normally do?
  doing well; taking time to be with your       functions themselves. Could any of you         Why did I step outside my knowledge base
  families, taking time to take care of         imagine simply performing one function         without further review or consult on this
yourself, staying healthy and enhancing         all day, every day? For the entrepreneurial    loan?” Maybe it is because we want a bit of
and protecting your businesses from the         CMA members, it would be a “roller coaster     the shrieking highs and lows of any great
ongoing changes to the market and the           on a flat track.”                              roller coaster to rise to the precipice, free
enactment of new legislation.                                                                  fall and then soar again.

As I had mentioned in the last Points of                                                       Currently, the real estate market is, in
Interest President’s message, I enjoy sharing                                                  many areas, rising in value very quickly.
quotes from famous people. This edition’s                                                      Properties that sold last month for
quote best described my thoughts about                                                         $1,250,000 are now selling for $1,450,000.
CMA as a group since we are strong and                                                         We are seeing not just multiple offers
bold:                                                                                          but unprecedented numbers of multiple
                                                                                               offers causing offers to exceed list price
  Yeah, life is complicated,                                                                   by as much as 10%, maybe more in some
                                                                                               areas. I was talking to one agent who had
  but if it wasn’t complicated,                                                                85 offers come in on one property and
  it would be a roller coaster                                                                 the final accepted offer exceeded the list
                                                                                               price by 12%, all cash, and, the original list
  on a flat track. Wouldn’t be                                                                 price was at market. There are four driving
  a ride worth taking.                                                                         forces that create such an occurrence: Low
    – Suspense writer Dean Koonz                                                               inventory, low interest rates, people who
                                                                                               feel they need to jump into the market,
Many of the CMA members consist of small                                                       people with cash.
enterprises which allow (or make) the Sometimes, although we ride a roller
owners to perform and perfect so many coaster ride every day, we want to make it               But, as any of us know who have been in
different functions of their business. Where wilder than it already is. Perhaps, it is not a   this business many years, this is a cyclical
a large company has a team of loan officers, conscious choice. It is just something that       market and every time there is a downward
processors, underwriters, loan committees wants us to feel bolder, more creative, just         adjustment in the market it follows an
for different types of loans, funders, closers, ... more. But, when looking back, we think     accelerated uptick. My message here
post-close auditors, HR teams, accounting “What was I thinking? Why did I work with            today is to be especially cautious when
departments, marketing departments and that borrower? Why did I let them push me
a myriad of other departments, our CMA into closing so quickly without performing                                      continued on page 29

Page 2                                                                                                                        Spring 2021
Spring 2021 - California Mortgage Association
Mayumi Bowers
                                                Editor,

      pring has arrived which means new life, fresh starts, and            As we progress through this year, I suspect that there is going to
      new opportunities. We can all agree that 2020 was a                  be a lot of change ahead in many aspects of our industry due to
      challenging year for a multitude of reasons. But 2021 is             legislation, the economy, and of course the ever-lingering effects
a new year with what looks like the promise of getting back to             of Covid-19 but I am optimist that these changes, whatever they
something that looks like normal again.                                    may be, won’t come as a jolt but a gradual change (just like the
                                                                           changes of the seasons).
It’s a time to let the spring showers rinse away all of the frustrations
and feed the new seeds of opportunity. The economy is picking              In this edition, we focus on a couple of those gradual changes
back up as things open back up, the vaccine is being distributed,          that may touch your business.
and hope springs eternal.

Spring 2021                                                                                                                          Page 3
Spring 2021 - California Mortgage Association
Page 4   Spring 2021
Spring 2021 - California Mortgage Association
By Michael J. Arnold & Michael D. Belote, Esq.
                                                       CMA Legislative Advocates

                                  Real Estate Issues
                               Front and Center For 2021
    f the analogy was to a horse race, we           evictions and foreclosures for example,         of housing needs, zoning, CEQA, finance,
    might say that the California Legislature       a budget trailer bill already has been          and many others.
    is “off and running” for 2021, the first year   enacted extending eviction protections
 of the new 2021-2022 session. During the           until summer. Legislators believe, correctly    Third, Governor Newsom and the
 pandemic, however, we really should say            or incorrectly, that an unlawful detainer       legislature are concerned about wildfires
 that the state Senate and Assembly are             tsunami will occur when the moratorium          and homeowners insurance availability.
“off and limping” to begin the legislative          ends. Foreclosures are a good deal more         As this column is written, the legislature is
 year, as 2021 is beginning in the same             nuanced, in that foreclosure rates are not      considering a budget trailer bill allocating
 remote fashion as last year. To be clear,          rising significantly, forbearances largely      over $500 million for wildfire costs and
 the legislative process does not function          seem available for those affected by the        prevention, including home hardening.
 well in a remote environment: in a recent          pandemic, and property owners still             Obviously nothing could derail a healthy
 hearing on evictions, an overwhelmed               have equity, because of the increases in        real estate market faster than the inability
 AT&T conference operator attempted                 home values. But with the recent CFPB           to obtain homeowner’s insurance, so this
 gamely to shepherd nearly 1000 landlords           proposal on foreclosures, it is likely that     too is a big issue.
 and tenants wishing to testify on a bill. The      California legislators will want to visit the
 result was exactly what would be expected,         issue this year.                                Beyond these mega-issues, CMA is also
 with barking dogs, crying babies, bad                                                              involved in numerous individual bills,
 connections, disconnections, drunk callers,        A second key issue with ramifications           including the following:
 abusive callers, and even people calling in        for CMA members is housing and
 on the wrong bill.                                 homelessness. Of the over 2500 discreet           • SB 373: Economic Abuse
                                                    pieces of legislation introduced for 2021,          Would prohibit collection activities
It turns out that legislating and lobbying          literally hundreds relate to housing in             in situations where various persons
is both more effective and more efficient           some fashion. Given the personal interest           specified in the bill opine that the
when done in-person. Who knew? But                  of Senate President Pro Tem Toni Atkins in          debt is the result of “economic abuse,”
in contrast to restaurants and baseball             the housing shortage, it is very likely that        broadly defined to include, among
games, which might be able to function              legislation will be enacted this year. But          other circumstances, defrauding the
with reduced capacity, the Capitol pretty           housing has proven to be a veritable Rubik’s        debtor of money or assets, in the
much has to be either open or closed.               Cube of complexity in the past, because             provision of products and services.
Because the building cannot accommodate             of the multiplicity of interests involved,          Real property-secured loans are not
unlimited visitors in the near-term, the            including local governments, NIMBYs,                exempt.
remote environment is likely to continue            YIMBYs, lawyers, labor, environmentalists,
for some time.                                      builders, and more. Probably every subject
                                                    involving the creation of housing is the
Several of the key issues of particular focus       subject of bills this year, including such
this year have implications for CMA. On             disparate topics as local fair allocations                             continued on page 29

Spring 2021                                                                                                                              Page 5
Spring 2021 - California Mortgage Association
Page 6   Spring 2021
Spring 2021 - California Mortgage Association
Mayumi Bowers
                                    Vintage Mortgage, Inc.

                A “Wyatt” Standard
               for Insurance Brokers?
                        n November of 1966, Joseph and Clarice Wyatt
                        walked into the Stockton office of Union Home
                        Mortgage to borrow $2,500.

                        They had no idea that the loan(s) they would get,
                        and the ultimate litigation, would be referenced
                        in numerous lawsuits against brokers, well into
                        the next century.
               Union, as a broker, failed to draw Wyatt’s       Basically, Murray sued the insurance broker
               attention to specific, unfavorable clauses       for failing to make the insurance policy
               in the loan, allegedly “breaching their          understandable. (Can insurance brokers
               fiduciary duty.” They were found, among          really do that?) The policy he purchased
               other allegations, to have engaged in a          didn’t even cover the ultimate loss against
              “conspiracy” against the borrower. The case       which he sought to be insured.
               is often referenced in litigation, to indicate
               a broker’s duty to look out for the interests    The decision considered that the broker,
               of the borrower.                                 (UPS) held themselves out as specializing in
                                                                the type of insurance purchased by Murray.
              Punitive damages were awarded against
              the broker – $200,000. That was “a lot of         In lawsuits against mortgage brokers, Wyatt
              money” in 1979, the year the broker lost          v. Union Home Mortgage is cited in at least
              their appeal.                                     one out of three cases. It’s interesting to
                                                                see Murry v. UPS as the “Wyatt” of insurance
              In the world of insurance brokerage, a new        brokerage. More important to us, it may
              decision, Murray v. UPS Capital Management,       help expand our understanding of the
              seems to impose a “Wyatt-like” duty on
              insurance brokers.                                                        continued on page 8

Spring 2021                                                                                         Page 7
Spring 2021 - California Mortgage Association
Wyatt – continued from page 7
standards imposed by Wyatt, something             Murray believed he purchased appropriate          That same day, Tokio Marine America
we should all be aware of.                        insurance to cover the loss, but the insurance    Insurance Company (Tokio) issued a Marine
                                                  company denied his claim.                         Certificate of Insurance (Certificate), which
Consider Googling Wyatt v. Union Home                                                               Murray believed fully insured the shipment
Mortgage. Reading the first eight or so           Murray sued his insurance broker, UPS Capital     in the event of any loss or damage by
paragraphs will give you a good overview          Insurance Agency (UPS Capital), for breach        UPS. The Certificate contained a Free
of the issues.                                    of contract and negligence. He asserted UPS       From Particular Average (FPA) provision,
                                                  Capital owed him a special duty to make the       providing a limitation on coverage.
An interesting note, one of the attorneys in      insurance policy language understandable to
the appellate case was Bruce H. Newman,           an ordinary person and to explain the scope       At some point during the shipment to
who was the original General Counsel for          of coverage. The court granted UPS Capital        Texas, UPS damaged the equipment and
CMA (before Phillip M. Adleson and now,           summary judgment after concluding there           Murray submitted a $36,666.85 claim.
Robert Finlay).                                   was no heightened duty of care and dismissed      Tokio rejected the claim on the grounds
                                                  Murray’s lawsuit.                                 the coverage Murray purchased did not
A special thanks to Attorney Craig Forry,                                                           cover the loss. Specifically, Tokio argued
of Forry Law, author of the following             On appeal, Murray asked to create a new rule      the Certificate’s FPA provision did not apply
article about Murry v. UPS Capital Insurance      that brokers/agents, specializing in a specific   to the shipping damages.
Agency, Inc. He was kind enough to allow          field of insurance, who hold themselves out
us to provide his article along with this         as experts, are subject to a heightened duty
introduction. I’m fortunate to be on Mr.          of care towards clients seeking that particular
Forry’s e-mail list (www.ForryLaw.com).           kind of insurance.

                                                  The appellate court declined the invitation to
                                                  create a per se rule; however, it reversed the
                                                  judgment and remanded the matter, and in
                                                  doing so confirmed some basic principles of
                                                  liability for insurance brokers/agents.

                                                                                                    Murray later learned the policy covered
                                                                                                    only catastrophic losses such as the entire
                                                                                                    destruction of the vehicle in which the
                                                                                                    shipment was carried by UPS, and not
                                                                                                    damage caused by factors other than a
Forry Article                                                                                       catastrophic loss such as mishandling the
                                                                                                    freight or other causes.
Introduction
In the recent decision in Murray v. UPS                                                             Murray sued UPS Capital, and his negligence
Capital Insurance Agency, Inc., the California                                                      claim was based on the premise UPS Capital
appellate court reversed the trial court’s                                                          owed a special duty to the public and to
granting of summary judgment, and                                                                   Murray to exercise reasonable care in its
remanded the action for a jury trial, because                                                       dealings including a duty of disclosure to
Murray raised triable issues of fact as to                                                          inform Murray of the products available
whether UPS Capital undertook a special                                                             to cover in-transit cargo loss and damage
duty by holding itself out as having expertise    In 2018, Murray contacted UPS Capital             in the absence of a catastrophic loss and
in inland marine insurance, and Murray            and requested insurance coverage for a            further to fully explain technical provisions
reasonably relied on its expertise.               shipment that same day from California            such as the FPA provision.
                                                  to Texas. He completed UPS Capital’s form
Murray purchased used computer equipment          application for a house policy coverage and       Murray maintained UPS Capital breached its
worth nearly $40,000, which was damaged           paid $350. On the form, Murray described          duty of care by failing to fully explain the FPA
by the United Postal Service (UPS) while it was   the shipment as used computer equipment
being transported from California to Texas.       valued at $37,000.                                                          continued on page 9

Page 8                                                                                                                               Spring 2021
Wyatt – continued from page 8
provision in the Certificate, by not disclosing   available and/or explain the limitations of     limited coverage available to ship his used
other available insurance products to             FPA coverage.                                   goods with UPS.
Murray, and by not giving Murray the
opportunity to purchase insurance that            The appellate court found no published          As a general rule, an insurance agent
would cover loss or damage caused by              cases on the issue of whether insurance         assumes only those duties found in any
factors other than a catastrophic loss.           brokers, selling one kind of policy,            agency relationship such as reasonable
                                                  automatically assume additional duties          care, diligence, and judgment in procuring
Murray argued an insurance agent may              simply because they are specialists,            the insurance requested by an insured.
assume additional duties by an express            implicitly holding themselves out as having
agreement or holding itself out as being a        expertise in that given field of insurance.     An insurance agent has no duty to
specialist. Because UPS Capital held itself       Murray proposed it create a per se rule         affirmatively advise an individual seeking
out as having expertise, it had a duty to         imposing a heightened duty of care for          insurance about different or additional
inform Murray of the basic coverage details       all specialized agents/brokers.                 coverage. There is no fiduciary duty to (1)
of the insurance policy.                                                                          make available to them a particular kind of
                                                  While the appellate court declined              insurance, (2) advise them of the availability
The trial court granted UPS Capital’s motion      to institute such a rule, it concluded          of such coverage elsewhere in the industry,
for summary judgment and dismissed the            public policy supports the creation of a        or (3) advise them of inadequacies in
lawsuit, concluding California law is well        reasonable inference of expertise when          coverage of which plaintiffs should, as
settled as to the limited duty of insurance       there is evidence the agent specializes in      reasonable persons, have themselves
brokers, which is only to use reasonable          a particular field of insurance.                been aware.
care, diligence, and judgment in procuring
the insurance requested by an insured.            The undisputed evidence of UPS Capital’s        However, an insurance agent may assume
                                                  specialization, in addition to Murray’s         a greater duty to the insured when one of
Murray contended the trial court erred            other evidence, created a triable issue of      the following three exceptions arise: (a) the
because he presented facts establishing           material fact that, if found true in Murray’s   agent misrepresents the nature, extent or
UPS Capital owed a heightened duty to             favor, would show UPS Capital assumed a
advise Murray that All-Risk insurance was         special duty to advise Murray about the                                 continued on page 10

Spring 2021                                                                                                                            Page 9
Wyatt – continued from page 9
scope of the coverage being offered or provided, (b) there is a       inquiry), Murray’s evidence raised a triable issue of material fact
request or inquiry by the insured for a particular type or extent     regarding application of the third exception (holding itself out
of coverage, or (c) the agent assumes an additional duty by either    as having expertise).
express agreement or by holding himself out as having expertise
in a given field of insurance being sought by the insured.            The case was remanded to permit a jury to resolve the triable
                                                                      issue of material fact as to whether UPS Capital was holding itself
Whether a duty of care exists is a question of law for the court.     out as having expertise in a specialized area of insurance, and
Also, whether, and the extent to which, a new duty is recognized      therefore, assumed a heightened duty of care.
is ultimately a question of public policy. Any extension of the
existing exceptions or creation of a new duty is ultimately a         LESSONS:
question of public policy.                                            1. The duty of insurance brokers/agents is limited to those found
                                                                         in any agency relationship such as reasonable care, diligence,
The appellate court found no case law specifically defining the          and judgment in procuring the insurance requested by an
phrase “holding themselves out as having expertise,” but it              insured.
discussed the factors that should be considered when applying
this exception, as discussed in the 1997 decision in Fitzpatrick.     2. An insurance agent may assume a greater duty to the insured
                                                                         when one of the following three exceptions arise: (a) the agent
The Fitzpatrick first of three exceptions, when the agent                misrepresents the nature, extent or scope of the coverage
misrepresents the nature, extent or scope of the coverage                being offered or provided, (b) there is a request or inquiry by
being offered or provided, was based on the court‘s analysis of          the insured for a particular type or extent of coverage, or (c) the
three cases: Nacsa – agent misrepresented policy provided full           agent assumes an additional duty by either express agreement
coverage to replace business personal property in case of total          or by holding himself out as having expertise in a given field
loss; Desai – agent misrepresented insured getting 100 percent           of insurance being sought by the insured.
replacement cost coverage with real property insurance policy;
and Free – homeowner specifically inquired if coverage limits         Craig B. Forry, Esq., FORRY LAW GROUP, (818) 361-1321 ForryLaw@
adequate to rebuild home.                                             Aol.com.

The second exception, when “there is a request or inquiry by the
insured for a particular type or extent of coverage”, was based on
Westrick, where an insurance agent failed to disclose facts about
immediate coverage for a recently purchased truck in response
to a specific inquiry about coverage. The court determined the
agent had a duty to explain a limiting provision to the insured
because the insured made prior inquiries regarding coverage of a
welding truck under his existing policy and the agent had superior
knowledge of the scope of the policy’s automatic coverage clause.

The third exception applied when “the agent assumes an additional
duty by either express agreement or by ‘holding himself out’ as
having expertise in a given field of insurance being sought by
the insured.

The appellate court concluded in Murray that neither case
authority nor public policy support creation of a per se rule
regarding specialists, but rather courts must utilize a totality of
the circumstances approach.

Evidence of specialization at a minimum creates a presumption
the agent/broker anticipates their clients will rely on their
acknowledged expertise, and supports courts imposing an
extended duty.

While UPS Capital’s evidence adequately refuted application
of the second exception (applicable when there is a request/

Page 10                                                                                                                       Spring 2021
Odell Murry
                                                                                                                        MAI Financial
                                                                                                                        Services, Inc.

                   Can Private Money Fuel
                  the Recovery Once Again?
As the Pandemic Retrenches, Private Money Steps Up
   n comparing the 2020 COVID -19                during late fall and early winter. Since then     lenders to once again “Save the Day,” as the
   Pandemic to the Great Recession of            rent prices have already begun to climb           private lending industry did so admirably
   2007, there are some major differences,       again, but it is still too soon to tell if that   in 2007 and 2008.
but some similarities. During the Great          rally will be sustainable without continued
Recession of 2007 institutional lenders          government intervention.                          Collapse of Employment
were quick to batten down the hatches, the                                                         The unemployment figures have been dire,
money stopped flowing, and the resulting         It can be said that the federal government        as whole sectors of the service economy
hasty retreat of institutional lenders allowed   certainly has intervened more quickly             were paused or diminished because of
private lenders to get involved to keep          in this case than in the Great Recession.         COVID-19 lock-down policies. In April
the gears of the real estate sector of the       The Federal Reserve swiftly dropped the           2020, the U.S. unemployment rate peaked
economy from locking up completely. As           Federal funds rate to near-zero, resumed          at 14.7%, and it has only scaled down to
traditional lenders backed away, private         programs to purchase massive amounts              6.4% in January 2021. As we all know, those
lenders seized the moment and stepped            of securities, backstopped money market           numbers likely are worse among people of
in to fill the void.                             mutual funds, and vastly expanded                 color and women, who economists say are
                                                 the scope of its repurchase agreement             bearing the brunt of this economic disaster.
Today’s economic indicators and the mood         operations. Congress approved a $1.8
may feel reminiscent of the lead-up to the       trillion package on March 27, 2020, which         Even a short-term interruption in employ-
Great Recession of 2007. Like with that          included $500 billion in direct payments to       ment can have disastrous consequences
economic disaster, the stock market has          Americans, $208 billion in loans to major         on credit scores for some potential home-
remained stubbornly strong throughout            industries, and $300 billion in Small Business    buyers, as bills become past due. If federal
the COVID-19 pandemic, despite concerns          Administration loans. Nine months later,          recovery programs fail to keep pace with
of a record number of people out of work.        a $2.3 trillion spending package, which           economic need, the credit picture for many
The lock-down has hampered much of               included a second round of stimulus, was          home-buyers, at least with institutional
regular economic activity, but at the same       signed into law.                                  lenders, may grow even murkier.
time, it has led to record levels of personal
savings. At the start of 2021, there are         The question is, what happens if the markets      Reshaping of the Real Estate Sector
some 10 million Americans behind on their        perceive that government funding dries up,        We are likely to see a dramatic reshaping
rent and mortgages, and it appears that          or that the funding provided simply isn’t         of the real estate outlook, and it may have
government programs are the only thing           enough to stave off calamity? Institutional       real ramifications for institutional and
preventing a massive crisis in the housing       lenders do not manage upheaval the way            private lenders. Office, retail, vacation, and
market, but that crisis showed signs of          that private lenders can. As a result, the        hospitality real estate all saw a significant
bubbling up to the surface as indicated by       opportunity for private lenders may be
falling rental prices in pricey coastal metros   here again. It may then be up to private                                  continued on page 12

Spring 2021                                                                                                                             Page 11
Recovery – continued from page 11
dip in value in 2020, and the bottom for      the Great Recession was devastating for the     These are indeed turbulent times, and it is
that dip isn’t predicted to come for some     real estate market, it was private money –      impossible to predict fully what the close of
time, according to a recent Bloomberg         gathered from private individuals, pension      2021 will look like in the economy or the U.S.
News Report. Also, people are rethinking      funds, IRA’s, and other private investors –     real estate market. What we can say with
where they are living and working, both       which proved a source of key capital during     some confidence is that history has shown
because of the pandemic and because           the recovery. For example, In 2012, privately   that private investors may be the lubricant
companies have been forced to realize that    funded multifamily property loans in the        that keeps the gears of the real estate sector
technology allows a dispersed workforce to    United States went up 22% over 2011, and        from locking up in times of crisis, and they
work effectively and, in some cases, more     privately funded loans for retail property      likely will be called on to play a large role
efficiently than they would in an office.     increased by 17%.                               in this latest recovery effort.
This means that investments in urban and
office real estate, once sure bets, are now   Private lenders are able to navigate more       Odell Murry is founder and president of MAI
on shakier ground.                            turbulent terrain because their definitions     Financial Services Inc., a private-mortgage
                                              of risk and success are fundamentally           company and institutional commercial
All this may spook institutional investors    different from traditional mortgage lending.    mortgage broker. He is also a board member
from putting money down on large-scale        Private loans are typically based on the        and past president of the California Mortgage
projects. However, there may be a need        amount of equity in a property, rather than     Association. Murry originates institutional
for more small-scale lending for housing in   on the borrower’s individual credit score,      and private-mortgage loans on apartments,
the suburbs and rural America, as people      for example. And private investors are          industrial, retail and most other income-
flee to places with more space and are no     more concerned with seeing a solid plan         producing commercial real estate. He also
longer tied geographically to their jobs.     for a good rate of return on investment         serves as chairman of the National Advisory
                                              than with credit scores, and that may lead      Board of the University of Massachusetts
Filling the Void                              them to find good investments when              W.E.B. Du Bois Center. You can contact Odell
Private lenders have proven they can step     institutional investors turn their back on      Murry at OMurry@MAIFunding.com or (866)
in when institutional lenders waver. While    certain borrowers in the real estate market.    MAI-FUND.

Page 12                                                                                                                      Spring 2021
Zachary J. Fiene, Esq.                                               T. Robert Finlay, Esq.
                     Wright, Finlay & Zak, LLP                                        Wright, Finlay & Zak, LLP

                             Am I a “Debt Buyer?”
     Understanding the New Wave of Debt
      Buyer Statutes and Their Impact on
   Servicing Non-Performing Mortgage Debt

T
      he financial goal of every debt buyer        consumer debt incidental to the purchase       • Cal. Civ. Code 1788.58:
      is uniform – maximize your return            of a portfolio predominantly consisting of       This section creates a template for
      on investment. As the debt buying            consumer debt that has not been charged          what must be included in the creditor’s
 marketplace expands, states are enacting          off. “Charged-off consumer debt” means           complaint.
 laws to regulate the industry and protect         a consumer debt that has been removed
 consumers. The only thing more damaging           from a creditor’s books as an asset and        • Cal. Civ. Code 1788.60:
 to your bottom line than a poorer than            treated as a loss or expense.                    This section is a roadmap for how and
 expected return on a purchased debt is                                                             when you can default the borrower when
 finding yourself in a lawsuit where your          This new law sets new requirements to be         they fail to respond to your lawsuit.
 exposure is in the tens of thousands of           mindful of when attempting collection on
 dollars because you unknowingly violated          a charged-off loan.                            • Cal. Civ. Code 1788.61:
 a new state law. California and Texas are                                                          This section gives borrowers who are
 two states who have recently passed               • Cal. Civ. Code 1788.52:                        defaulted, fairly wide latitude to seek
“debt buyer statutes” aimed at companies             This section fairly painstaking tells          to set aside default judgments.
 purchasing charged-off debt on the                  you what must be included in your
 secondary market. This article explores             communication with the borrower and          • Cal. Civ. Code 1788.62:
 the impact of those laws on debt buyers,            should be followed to the letter.              This section lays out all the different
 the potential applicability to residential                                                         categories of damages a borrower
 mortgage debt and things to be on the             • Cal. Civ. Code 1788.54:                        might sue for violations of the foregoing
 lookout for.                                        This section ensures if you reach a            sections.
                                                     settlement or workout with the borrower
California Fair Debt                                 that it is reduced to writing and if they    At this point, there does not appear to be
Buyers Practices Act:                                make payments under that agreement,          clear guidance on whether the California
On January 1, 2014, California’s Fair Debt           that within 30 days of receipt, they must    law will apply to mortgage loans. The laws
Buying Practices Act (“FDBPA”), Civil Code           be sent a statement that shows the           itself doesn’t purport to but is essentially
§ 1788.50, et seq. took effect. Under this           amount paid, remaining balance, among        silent. Because the laws is relatively new,
law, “debt buyer” means a person or entity           other things.                                there are no appellate level cases that
that is regularly engaged in the business of                                                      have evaluated the issue yet, but the
purchasing charged-off consumer debt for           • Cal. Civ. Code 1788.56:                      expectation is that before long, someone
collection purposes, whether it collects the         This section states that you cannot sue a    will challenge it and an appellate Court
debt itself, hires a third party for collection,     borrower if the statute of limitations has   will come down with a decision. The
or hires an attorney-at-law for collection           expired. If you do, the section gives the    conservative approach is to make sure you
litigation. “Debt buyer” does not mean a             borrower the right to recover damages,
person or entity that acquires a charged-off         as discussed more below.                                            continued on page 14

Spring 2021                                                                                                                          Page 13
Debt – continued from page 13
comply anyway, however, the law seems to        • Thus, it appears that the “debt buyer”      • The Oregon law also prohibits a debt
have a greater impact on older, consumer          definition is intended only to cover          buyer from bringing an action against
debt with poor documentation and most             purchasers of portfolios of charged-off       or initiating arbitration with a consumer
real estate loans hopefully will include          debt rather than purchasers of portfolios     for the purpose of collecting a consumer
most of, if not all of the information and        consisting primarily of current debts.        debt after the statute of limitations has
documentation needed to comply with the                                                         expired. The law specifies the notice
law. The other requirements are probably        • The bill prohibits a debt buyer from          that a debt buyer must give to a debtor
best practices anyway when seeking to             commencing an action against or               as well as the documents the buyer must
enforce a charged-off loan in CA. We are          initiating arbitration with a consumer        give upon request.
seeing more and more cases where the              for the purpose of collecting a consumer
borrower files suit to avoid a HELOC or 2nd       debt after the statute of limitations has   • The law requires those who engage
loan that they thought was charged-off            expired. It provides that if a collection     in debt buying in the state to obtain a
years ago. The last thing the collecting          action is barred by this prohibition,         license from the Director of Department
creditor wants is an actual violation of the      the cause of action is not revived by a       of Consumer and Business Services. The
FDBPA turning an investment into a loss.          payment or oral or written affirmation        director has authority to order a debt
                                                  of the consumer debt.                         buyer to cease and desist from violating
Texas Debt Buyer Statute:                                                                       this law, impose civil penalty or take
Texas has also enacted a law that pretty        • If a debt buyer is attempting to collect      other action to remedy such a violation.
closely follows the California equivalent.        a debt for which a collection action
This law is even newer than CA – it has only      is barred, the debt buyer or a debt         Washington Debt-Buyer Statute:
been around since 2019, so at this point,         collector acting on the debt buyer’s        Washington state has also enacted a debt-
we just don’t know how Texas Courts will          behalf must provide a specified notice      buyer law. The Washington law passed
interpret the law and whether Courts will         in the initial written communication with   in 2020, so it is the most recently passed
conclude it applies to residential mortgage       the consumer. The content of the notice     debt-buyer statute of the four discussed in
debt.                                             varies depending on whether the FCRA        this article. Since the law just took effect in
                                                  time period for reporting the debt at       the middle of last year, Washington courts
On June 14, 2019, Texas amended Chapter           issue has expired and whether the debt      have had even less time to interpret the law
392 of the Texas Finance Code dealing             buyer furnishes information about the       with regard to residential mortgage debt.
with debt collection. The amendments              debt to a consumer reporting agency.
are effective September 1, 2019.                                                              On March 18, 2020, Washington amended
                                                Oregon Debt-Buyer Statute:                    Chapter 19.16 of the Revised Code of
• The bill defines a “debt buyer” as “a         Oregon is another state that has enacted      Washington Annotated (“RCWA”) dealing
  person who purchases or otherwise             a debt-buyer law that similarly follows the   with collection agencies. The amendments
  acquires a consumer debt from a creditor      California and Texas statutes. The Oregon     became effective June 11, 2020.
  or other subsequent owner of the              law passed in 2017, just three years after
  consumer debt, regardless of whether          the California equivalent took effect. Like   • The Washington law defines “debt buyer”
  the person collects the consumer debt,        the newer Texas statute, Oregon courts          similarly as the three previous states
  hires a third party to collect the consumer   have not had long to interpret the law          except that it explicitly states that an
  debt, or hires an attorney to pursue          with regard to residential mortgage debt.       entity may also be a debt buyer.
  collection litigation in connection with
  the consumer debt.”                           On August 10, 2017, Oregon amended            • Unlike the previous debt-buyer laws, the
                                                Chapter 646 of the Oregon Revised               Washington statute does not exclude
• Excluded from this definition is “a person    Statutes dealing with debt collection. The      from the definition buyers who acquire
  who acquires in-default or charged-off        amendments became operative January             charged-off debt as an incidental part
  debt that is incidental to the purchase       1, 2018.                                        of acquiring a portfolio of debt that is
  of a portfolio that predominantly                                                             predominantly not charged-off debt.
  consists of consumer debt that has not        • The Oregon law shares with California         The law also does not define “charged-
  been charged off.” “Charged-off debt”           and Texas similar definitions for “debt       off debt.”
  is defined as “a consumer debt that a           buyer” and “charged-off debt.” It also
  creditor has determined to be a loss or         similarly excludes persons who acquire      • Therefore, a person that acquires
  expense to the creditor instead of an           charged-off debt as an incidental part        charged-off debt, regardless of whether
  asset.”                                         of acquiring a portfolio of debt that is      the charged-off debt is incidental to
                                                  predominantly not charged-off debt.
                                                                                                                      continued on page 15

Page 14                                                                                                                       Spring 2021
Debt – continued from page 14
  or the primary focus of the acquired        The Oregon, Texas, and Washington                to a specific loan, please do not hesitate to
  portfolio, may fall under the Washington    statutes are all remarkably similar to the       contact Robert Finlay at rfinlay@wrightlegal.
  statute definition of a “debt buyer.”       California law. The expectation is that          net.
                                              Court’s will soon clarify the applicably to
• Like all previous debt-buyer statutes,      residential mortgage debt, which will allow      Disclaimer: The above information is
  the Washington law prohibits debt           debt buyers to revise their due diligence        intended for information purposes alone
  buyers from bringing an action against      and collection processes. The bigger             and is not intended as legal advice. Please
  or initiating arbitration with a consumer   question is whether even more states will        consult with counsel before taking any
  for the purpose of collecting debt after    follow California’s lead, as they so often do,   steps in reliance on any of the information
  the statute of limitations has expired.     and establish their own Debt Buyer statute.      contained herein.

• The law prohibits debt buyers from          Takeaways:                                       Zachary Fiene is an Associate Attorney at
  commencing legal action against             1. Prior to buying a pool that consists          WFZ’s California office. Robert Finlay is a
  a debtor without attaching to the              predominantly of charged-off consumer         founding Partner of WFZ.
  complaint a copy of the contract or other      debt, consult an attorney to determine
  writing evidencing the original debt that      whether any of the states where the debt
  contains the debtor’s signature. The law       is located have debt buyer statutes; and
  also lists a number of disclosures a debt
  buyer must give to the debtor when          2. Prior to reaching out to collect any newly
  commencing legal action.                       purchased charged-off consumer debts,
                                                 consult counsel to make sure you are
• Washington also prevents debt buyers           complying with the applicable debt
  from seeking default judgments on the          buyer laws.
  debt unless they establish that they are
  owners of the debt amongst several          If you have any questions regarding these
  other conditions.                           debt buyer statutes or how they may apply

Spring 2021                                                                                                                       Page 15
SUMMER SEMINAR
                San Diego Mission Bay Resort
                            July 29-30, 2021
          SAVE THE DATE!

Page 16   CMA Summer Seminar • July 29th - 30th, 2021                Spring 2021

          Register Online at www.CaliforniaMortgageAssociation.com
CMA Thanks Our Annual Sponsors
                         — Silver Sponsor —

CMA Thanks Our Virtual Spring Seminar Sponsors
                       — Platinuim Sponsors —

                         — Gold Sponsors —

                        — Silver Sponsors —

Spring 2021                                     Page 17
Page 18   Spring 2021
Spring 2021   Page 19
Page 20   Spring 2021
DONATE TO THE CMA PAC TODAY!
   CMA’s positive influence is crucial for our survival. Send your contribution today!
                                                                                                                                                                  $75,000
                                           It’s easy to donate:                                                                                                    Goal
                            Online at www.californiamortgageassociation.com
                                                 — or —
                         Send the additional amount with your monthly CMA dues
                                                                                                                                                                            $41,753
                                                                                                                                                                             raised so
                                                 — or —
                                                                                                                                                                             far since
                             Write a check to “CMA PAC” and send it today to:                                                                                               July 1, 2020
                         2520 Venture Oaks Way, Suite 150 • Sacramento, CA 95833

                PROTECT YOUR INDUSTRY – CONTRIBUTE TODAY!
                                  For more information contact:
                   Richard Wachter, Chairperson, CMA PAC Fundraising Committee
                                          1-800-308-4961
     Our PAC and our advocates in Sacramento always operate in full compliance with all laws and regulations relating to efforts to influence the public policy
     process. We would never engage in any type of quid-pro-quo on public policy issues or entertain contributions in return for access. We support legislators
     who are philosophically aligned with the interests of our membership and who work to ensure a business environment which allows our members to flourish.

Spring 2021                                                                                                                                                                       Page 21
PAC Contributions from July 2020 - March 2021

      $2,000 – $7,300              $1,000 – $1,999 continued          $500 – $999 continued
      Fidelity Mortgage            Herzer Financial Services, Inc.        Private Lender Link
                                           Redwood City                       Redwood City
         Lenders, Inc.                                                 Spiegel Accountancy Corp.
          Los Angeles               LBC Capital Income Fund                   Pleasant Hill
                                         North Hollywood
                                                                         Sun Pacific Mortgage
 PLM Lender Services, Inc.           Mortgage Vintage, Inc.                   Santa Rosa
        Campbell                         Newport Beach
                                                                       Val-Chris Investments, Inc.
     Selzer Home Loans                  ReProp Financial                           Irvine
            Ukiah                            Eureka                  Woodland Hills Mortgage Corp
                                                                            Woodland Hills
    Stonecrest Financial               Standard Mortgage
                                      Financial Services Inc.
        To view this member-only content,
          San Jose                          Riverside                       $200 – $499
                                                                        A.C.M. Investor Services, Inc.
          Wachter
                become
      Investments, Inc. a member of CMA  $500 – $999
                                                                                  Larkspur

                                                                            Action Funding, Inc.
          Burlingame                     Anchor Loans, Inc.                      Calabasas
                                           Thousand Oaks
                                                                       Allstar Financial Services, Inc.
      $1,000 – $1,999                        Buchalter                          Woodland Hills
                                             Los Angeles
      Abundance Capital                                                   Asher Evan Investments
                                                                                 Carmichael
           Milpitas                       Casco Financial
                                             Los Gatos                      Bay Laurel Financial
       Cushman Rexrode                                                           San Carlos
      Capital Corporation                 Creative Realty
                                       Marketing & Mortgage               Budget Mortgage Corp.
            Oakland                                                            Los Angeles
                                             Bakersfield
                                                                             Empire Trust Deed
     Equity Wave Lending                JMJ Financial Group                    Woodland Hills
             Irvine                         Garden Grove
                                                                              Hamilton Ridge
                                           Law Office of                    Asset Management
    FCI Lender Services, Inc.                                                     San Jose
          Anaheim Hills              Benjamin R. Levinson, APC
                                             Campbell                     Lantern Financial Corp.
                                                                              Sherman Oaks
    F.E. Forbes Company Inc.         MAI Financial Services, Inc.
             Berkeley                        Toluca Lake
                                                                                      continued on page 23

Page 22                                                                                        Spring 2021
PAC Contributions from July 2020 - March 2021

   $200 – $499 continued                       $20 – $199 continued                   $20 – $199 continued
        Mid Valley Services, Inc.                      E.F. Foley & Co., Inc.           Sequoia Mortgage Capital, Inc.
                 Fresno                                       San Jose                           San Anselmo

                                                    Federal Home Loans Corp.                 Stadia Capital Group
       Mortgage Securities Inc.                             San Diego                            El Dorado Hills
              Encinitas
                                                          James Baron                          Sunset Mortgage
           Mortgage+Care                                    Saratoga                             Mission Viejo
       LOAN SERVICING SOFT Inc.                   Mortgage Lender Services, Inc.               The Argus Group
          San Juan Capistrano                               Fair Oaks                           Woodland Hills

      North Coast Financial, Inc.              Murphy Austin Adams Schoenfeld LLP            The Helvetica Group
              Carlsbad                                     Sacramento                              Carlsbad

                                                  National Equity Funding, Inc.                The Norris Group
       Pacific Capital Loans, LLC                            Irvine                                Riverside
                Calabasas
                                                       NDetail Capital LLC                Total Lender Solutions, Inc.

          To view this member-only content,
      Private Mortgage Fund, LLC                         Newport Beach                             San Diego
               Calabasas                                                                         Trilion Capital
                                                   Pacific Capital Funding Corp.
                                                             Calabasas                              San Diego
      Residential First Mortgage

               become a member of CMA
            Newport Beach

        Unitrust Mortgage, Inc.
                                                   Pivotal Capital Group II, LLC
                                                           Ladera Ranch

                                                PrideCo Capital Management, LLC
                                                                                       Valley Mortgage Investments, Inc.
                                                                                                  Bakersfield

                                                                                         Wilshire Finance Partners, Inc.
               San Diego                                  Newport Beach                          Newport Beach

        Watsonville Mortgage                       Private Capital Investments             Wright, Finlay & Zak, LLP
             Watsonville                                     Danville                           Newport Beach

     Woody Financial Realty Corp.                     Private Financial, Inc.
                                                          Sherman Oaks
             Long Beach
                                                    Redwood Mortgage Corp.               PAC
           $20 – $199
                                                          San Mateo

                                                Redwood Trust Deed Services, Inc.
                                                                                    Announcements
                                                          Santa Rosa
         A.S.K. Investments, Inc.                                                   • AirPods:
                 Anaheim                                S&L Capital Group             Boris Dorfman & Sandy MacDougall
                                                              Brea
           Agricultural Finance
            San Juan Capistrano                         Select Mortgage             • Apple Watch:
                                                            Calabasas                 Shafiq Taymuree
        Applied Business Software
                Long Beach

              Bench Equity, LLC
                    Mesa
              Dryden Capital Inc.
                   Novato

              Duner and Foote
                   Irvine

Spring 2021                                                                                                              Page 23
Donna Muratalla
         Genworth
Mortgage Insurance

                     Got Solar? Questions to Ask When
                   Underwriting a Home with Solar Power
       olar power is gaining momentum in       Questions to Ask When Originating or           Does the home maintain access to
       the U.S., and we’re moving towards      Underwriting a Home with Solar Power           electrical utilities consistent with
       incorporating this cleaner, more        When your borrower is considering              community standards?
efficient source in many areas of our lives,   purchasing or refinancing a home with          This answer must be “yes” in this case.
including our homes.                           solar panels, there are some specific
                                               questions you’ll want to ask upfront.          Is there a Property Assessed
Solar energy technology has come a                                                            Clean Energy (PACE) loan?
long way in the last 100+ years: solar cell    What is the ownership and debt                 If the PACE loan is structured as a
technology was first produced in the late      financing structure of the solar panels?       subordinate lien or unsecured loan, it
1800s, and solar panels as we know them        If the borrower owns, or will be the owner     may be GSE eligible. If the PACE loan is
today were created in 1954. Solar power        of the solar panels (cash purchase; included   not expressly subordinate, it is ineligible.
has been part of some amazing feats,           in the purchase price; financed previously     PACE loans dated prior to July 6, 2010, may
including the first round-the-world solar-     and now paid in full OR secured by the         also be eligible. Got to https://selling-guide.
powered flight in 2016 and the construction    first mortgage) you will typically be able     fanniemae.com/Selling-Guide/Origination-
of the largest solar-powered railway bridge    to verify via title and solar-related credit   thru-Closing/Subpart-B5-Unique-Eligibility-
in London, England.                            report debt. The solar panels may be           Underwriting-Considerations/Chapter-B5-
                                               included in the value.                         3-Construction-and-Energy-Financing/ for
The good news is solar power has become                                                       more information.
more accessible to the average consumer,       Are the panels leased
and more homeowners are incorporating          or owned outright?                             Is the Solar Panel loan unsecured?
solar panels into their homes. In the U.S.,    You will want to obtain a copy of the Power    If so, obtain the invoice to verify solar
California is leading the pack with over one   Purchase agreement or lease agreement.         panels were installed at the subject
million solar units installed in homes as of   If you’re looking at a property with leased    property site.
2019. This number is growing, especially       panels, the value of the panels may not be
with California legislation requiring most     included in the appraised valuation.           Check the Appraiser’s Requirements
new construction homes, built January                                                         In addition to the above questions, you’ll
2020 and onward, to incorporate solar          Further, if the panels are leased, you’ll      want to ascertain the appraiser has
energy measures. Many states have              need to determine the monthly payment          accurate information about the ownership
incorporated solar power into their            amount and incorporate that amount             structure of the solar panels to:
legislation, as well.                          into the ratios unless the lease provides
                                               delivery of specific amount of energy at        • Review the complete contract and
Whether you’re originating or underwriting     a fixed payment during a given period             comment on the terms
loans in California or other states with       and has a production guarantee that
a strong solar power presence, there           compensates the borrower on a prorated          • Be familiar with energy reports and
are some questions to consider when            basis in the event the solar panels fail to       ratings and include the information in
gathering data during the processing of        meet energy output required during the            the report
the file.                                      lease period.                                                        continued on page 25

Page 24                                                                                                                       Spring 2021
Solar – continued from page 24
• Provide comparable sales to support, if available

• If no similar sales are available, the income approach, cost
  analysis, discounted cash flow or market surveys may be
  appropriate.

Be Flexible When Underwriting the Collateral
One final recommendation is to remain open-minded when
considering appraisals that may lack solar panel comparable
sales. Some markets just may not have sales with similar energy
sources during this time of solar growth.

If you have any questions regarding underwriting properties
with solar panels, or other interesting scenarios, please reach out
to your Genworth Regional Underwriting team to discuss them.
We’re always happy to assist you!

Donna Muratalla is Genworth Mortgage Insurance’s Pacific Northwest
Regional Underwriting Manager. She is a Certified Residential
Underwriter with 28 years in the MI industry. She specializes in HFA
and Risk review.

Spring 2021                                                            Page 25
Donald Hensel
                                          T
                                                  he California Mortgage Association turns the spotlight on members who are making an impact in
                                                  their professional field and around the Association. These members exemplify the mission of the
                                                  CMA. We know that our members are one of the most important aspects of this Association, and we
                                           work hard to feature outstanding members. This quarter, the California Mortgage Association turns the
                                           spotlight on member Donald Hensel, President of North Coast Financial located in Oceanside, California.
                                           Donald has been a member of the California Mortgage Association since its inception. In addition to being
                                           a longtime member, he has also volunteered his time to many CMA committees, seminars, and panels. He
                     Angelica              was on the Summer Seminar Committee when it was formed 10 years ago and was a panelist or moderator
                     Gardner               at each of those summer seminars. Donald has also served on the Nomination Committee, which he was the
                     Asher Evan            chair twice, the Bylaws Committee, and he is currently on the Consumer Lending Focus Group Committee.
                     Investments           We are grateful to have Donald as a member and are excited for our members to learn more about him.

Q    Tell us a little about you, your
     family, hobbies, etc.                                                                          Q     What do you do for work?
                                                                                                          What is your typical day like?

A     After growing up in Illinois and
      graduating from the University of
Illinois and Northwestern (MBA), I started
                                                                                                    A     Since I am involved in every aspect of the
                                                                                                          business, my day includes everything
                                                                                                    from loan negotiations, processing and
my career at Procter and Gamble. In 1978                                                            document preparation to loan servicing and
they made the mistake of transferring me                                                            customer relations. My typical day involves
to California and I never went back. My wife                                                        setting priorities on whatever tasks need to
(Anne) and I live in Oceanside and my son                                                           be done that particular day and making sure
(Jeff) lives in San Diego. I love to bike ride,                                                     they get accomplished. The top priorities
play golf and play pickleball. For the last 30                                                      are always progressing loans towards closing
years, I have been the treasurer of our youth                                                       and the timely disbursement of payments
soccer club in Oceanside. I am an amateur                                                           to lenders. Fortunately, my son Jeff joined
woodworker and I am also a registered tax                                                           the company six years ago which has been
professional which keeps me busy during
tax season.                                                                                                                  continued on page 27

Page 26                                                                                                                              Spring 2021
Hensel – continued from page 26
a great benefit to our business. Much of my     fiduciary duty to both the lender and             clients in person, the biggest change for me
day is on the phone with him since the two      borrower and our reviews show it. It’s not        is that my business casual attire at work has
of us are the loan committee.                   unusual for us to spend time helping a            changed to just causal!
                                                borrower find a solution to their problem
                                                even after we have decided not to approve
                                                their loan request. Treating borrowers and
                                                lenders with the time and respect that they
                                                                                                  Q    Describe your idea of a perfect day.
                                                                                                       Where would you be? Who would
                                                                                                  you be with? What would you be doing?
                                                desire can be time consuming but it pays
                                                dividends in the end.
                                                                                                  A    My perfect days are during my annual
                                                                                                       vacation in Hawaii with my wife. I spend

                                                Q   How long have you been a member
                                                    of the CMA?
                                                Why did you join the CMA?
                                                                                                  an hour or two responding to emails and
                                                                                                  other work matters and then a full day of
                                                                                                  fun and relaxation.

                                                A     I joined CIMBA (California Independent
                                                      Mortgage Broker Association) in the
                                                mid-’80s primarily for the educational
                                                seminars. I was a founding member of CTDBA
                                                (California Trust Deed Broker Association) and
                                                was on the Board of Directors. As a member

Q    How did you find yourself working
     in this industry? Was it love at first
sight or a longer path?
                                                of that board, I worked on the merger with
                                                another mortgage association to form CMA.
                                                I highly value the education, networking and
                                                relationships that I have developed through

A     After P&G moved me to Northern
      California, I started to talk with my
college roommate who had moved to the
                                                these organizations. My actions speak louder
                                                than words. In 35 years I have missed only one
                                                educational seminar and that was because it
San Diego area to join a relative in the hard   conflicted with my honeymoon. I made the
money lending business. I had a strong          right choice missing that seminar!
interest in real estate and my education was
in finance so hard money lending was very
intriguing to me. Long story short, I moved     Q    Knowing that you have attended
                                                     many CMA seminars, what is one
                                                                                                  Q   What is the last app you
                                                                                                      downloaded on your phone and
                                                                                                  why did you download it?
to Southern California to join that business    thing you look forward to the most at
and then later started my own business.         each event?
                                                                                                  A     I downloaded a golf app that is
                                                                                                        connected to my clubs. Since my clubs

Q    Who is your ideal/target customer?
                                                A    I can’t pick just one thing. The education
                                                     through the seminars is invaluable as
                                                                                                  have GPS sensors, after a round I can review
                                                                                                  every shot including the club used and the

A    We are always looking for any borrower
     with good collateral along with a
reasonable loan request and exit strategy.
                                                well as learning new ideas (and mistakes to
                                                avoid) when talking with other members.
                                                Being with life-long friends and meeting
                                                                                                  distance hit. Non-golfers will think “so what?”
                                                                                                  Golfers will think “that is cool!” We need to
                                                                                                  utilize technology to our benefit in both
We lend throughout the state but we avoid       new people is a highlight of every seminar.       work and play.
rural areas. Since we are NMLS licensed, we
do a significant volume of consumer loans.
Our favorite consumer loan is a bridge loan
to someone who has significant equity in
                                                Q    Since the COVID-19 stay at home
                                                     order was implemented, how
                                                has your work been impacted by the
their current residence and needs cash to       shutdown/economy?
purchase a new residence.

Q    What sets your company apart
     from others?
                                                A     When the shutdown hit, we kept busy
                                                      with the existing pipeline. After the
                                                initial “deer in the headlights” moment
                                                passed, we began to realize that the California

A   Since our slogan is “Our Professional-
    ism Sets Us Apart,” I would say
professionalism. We take seriously our
                                                real estate market was mostly not impacted
                                                by COVID and our business has continued
                                                strong. Since I am currently not meeting with

Spring 2021                                                                                                                            Page 27
You can also read